The instability of the voluntary contribution mechanism

Tatsuyoshi Saijo ()

No SDES-2014-3, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: I consider systems with voluntary contribution mechanisms (VCM) in a quasilinear environment, showing that they are not asymptotically stable under simultaneous difference equations, and are structurally unstable under simultaneous differential equations. However, a VCM system is stable in a Cobb–Douglas (CD) environment under simultaneous differential equations; it is also stable under simultaneous difference equations given conditions on the slope of best response functions and the number of players. Most of the parameters investigated in nonlinear experiments on the VCM so far have been on the boundaries between stability and instability, and there has been hardly any work on instability. Therefore, research on the private provision of public goods faces a new challenge in addition to free riding.

JEL-codes: C62 C72 C92 H41 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2014-10, Revised 2014-10
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in SDE Series, October 2014, pages 1-18

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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2014-3

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